Deposit Refund?

Question

If you have a renter who breaks a lease  and leaves six months before the year, if you recoup by renting the unit immediately and the previous renters leave the unit in great shape, do you return any of the deposit?  
  I had some really good renters who left because they needed a bigger place. I was thinking of returning a partial refund. Any thoughts?

Jon Holdman · Answer

In most states, you're not allowed to collect double rent.  So, your old tenant is responsible for the rent until you get it re-rented.  They may also be responsible for costs you would normally bear, such as advertising.  And they are responsible for any damage.

You absolutely should creating an accounting of what they owe you.  Itemized.  Then, you should subtract off the deposit.  if there's money left, send it to them.  If not, send them a bill.

Most states have a time limit.  You should send that letter within the time limit.  If you haven't yet got a new tenant, include a statement that they remain responsible for the rent until its filled.  Once you have it filled, and you can make a final accounting, send a second letter.

Send that letter within the time limit.  Otherwise, you're essentially saying "there's no damage, and you get your full deposit back".  In some areas, if they take you to court they can collect double or triple. Don't risk it by not sending the letter.

If you have no penalty clause, you can't add one now for this tenant.  Just give a proper accounting of your costs and lost rent and bill them for the excess or refund the difference.

Account Closed · Answer

Every state is different.  As a landlord you will want to learn your states Landlord - tenant laws very well.  Unfortunately many tenants do know them well and in a state like Washington they can quickly turn them against a landlord.

Many things have to be in writing and proper notices given.

Here is something that might help.

http://blog.laborlawtalk.com/2008/02/06/breaking-a-lease-in-west-virginia/

Joe Pitrolo · Answer

My leases need to have a penalty clause so this is not an issue. Technically, the renter is breaking a contract and I don't think I am legally obligated to refund any amount. I have to re advertise, clean etc.
  Also, I would have a much higher rent for a six month lease as opposed to a one year lease.

Account Closed · Answer

Another situation where the local laws are paramount.

The new Florida law states that it is up to the landlord to declare in the lease what the penalty will be for breaking a lease.

Two choices are a two-month penalty that does not take anything else into consideration. Break the lease, and pay two months rent PLUS any damages.

The second is the old way of how much did you spend to find a new tenant, repairs and all rents up until a new tenant is found.

Most new leases are using the two month clause now as it was always such a pain to go through the costing and security handling with the second method; the security could be tied up indefinitely.

Again all the proper security handling notification procedures must be followed to the letter of the law, and that normally requires a certified letter to go out withing some time period.

Local laws rule the situation.

Jeff B. · Answer

Legally like Brain already stated you are to return any part of the security deposit that is not used for bringing the unit to the same condition as when it was rented.  What I mean is if the carpets need cleaning, some touch up paint, appliances cleaned then be all means deduct it.

Do Not fail to return the security deposit or forget to send the tenant notice as to why you are keeping any part of the security deposit.  If they take you to court you have to prove the condition of the unit, repairs or maintanance performed and the costs.  In some states they are renter friendly and if you don't send notice within 30 days then they can sue for 2 or 3 X's the amount of the security deposit and get it by law.  You could also be on the hook for interest if you fail to return the security deposit within a reasonable amount of time (30 days)

Brian Levredge · Answer

In most states it's illegal to charge double rent.  You are certainly entitled to keep the pro rata portion between them leaving and you re renting the place as well as administrative costs, cleaning, etc.  This is the exact reason we put a penalty clause for breaking the lease into our leases.  It's equal to or slightly greater than one month's rent.

Sally Strumbo · Answer

They broke a contract. Business is business but if you feel strongly about returing a portion of the deposit then do so.

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